On April 20, 2009, a federal judge from the District of Columbia dismissed a lawsuit brought by several cardiac catheterization facilities and their physician-owners challenging CMS’s expanded definition of “entity” under Stark Law. The new definition, set to become effective October 1, 2009, effectively eliminates the use of “under arrangements” by prohibiting physicians from referring Medicare patients to entities that perform DHS, in addition to entities that bill for DHS. According to the plaintiffs, the new definition is contrary to congressional intent, based on an impermissible construction of the Stark Law and exceeds the agency’s authority. Ultimately, the suit was dismissed without discussion as to the legality of the new definition. Rather, the judge dismissed the suit on jurisdictional grounds, relying on the general rule that the Medicare Statute precludes federal question jurisdiction to hear pre-enforcement challenges to Medicare regulations before a claimant exhausts its administrative remedies prior to filing suit.
To see the opinion, click here.